Hubs and Spokes

[ChockJockey]

With the merger ongoing there are still a lot of changes yet to occur in AA's network.  The looming FOS integration is expected to allow the airline to allocate equipment more freely between stations for better utilization and optimization.  I thought we could try a thread where we can discuss news, rumor, and predictions about hubs, routes, strategy, equipment, and destinations and the changes we are seeing or hope to see.
 
I had considered starting this thread a long time ago but didn't see the point as certain posters now since banned would have ruined it pretty quickly.  This is not a labor thread but feel free to discuss labor issues as they pertain to the airline's network.
 
Cheers!

 

[ChockJockey]

I'll start off with my station.  PHX just last night came off of the summer FLEX schedule.  The gate reconfiguration is in full-swing to increase the number of gates that can accommodate 757's, 737's, and 321's with the N1 concourse being pretty much finished.  The blast fence at the hangar is also being moved in order for the parking spots there to fit larger narrowbodies.  Work is underway to remodel the breakrooms which were in bad need of attention.  A new route was recently announced, PHX-SGU (St. George, UT) will operate daily on a CRJ-200 beginning Nov. 4th.
 
The City of Phoenix meanwhile is continuing its years-long resurfacing project at T4 which has been causing intermittent gate closures for some time.  Runway 8/26 (North runway) will be closed for about a month this Fall for repairs, which could make things tricky.  Terminal seating is being replaced as is the flooring, though I will be sad to see the airplane-theme carpeting go.
 
Rumors of widebody service from PHX to Hawaii and LHR which last year were getting heavy rotation amounted to nothing at all.  But the three-year commitments to keep hubs in place made to the states and the Feds are set to expire soon, aren't they? 
 
To be continued...

 

[AANOTOK]

To be honest Chock, I'm in Dallas, have been for my entire 33 years. I would love to get educated on the others like you are trying to do, but I have no clue about PHX or any other LUS hub. Heck, I don't even know much about ours other than who they are. One question I would have would be if we are going to try and set up shop once again at Dallas Love Field and compete with Southwest.

 

[ChockJockey]

To be honest Chock, I'm in Dallas, have been for my entire 33 years. I would love to get educated on the others like you are trying to do, but I have no clue about PHX or any other LUS hub. Heck, I don't even know much about ours other than who they are. One question I would have would be if we are going to try and set up shop once again at Dallas Love Field and compete with Southwest.

 
It's cool.  You can find the interactive route map here if you want to see where AA flies.  Click Routes and then un-click 'Add AA Connections' and 'Add AA Partners' and you'll be able to see exactly where AA-branded metal flies from any city.
 
Not sure about DAL, I'd imagine that with the lapsing of the Wright Amendment and WN's huge growth there yields have dropped in the Dallas market.  I don't know if AA's strategy regarding Love is to get back in or just keep DL out, but there's been a lot of chatter about it on the interwebs.

 

[Kev3188]

Cool thread idea, CJ!

 

[hp-csr-phx]

AA had to give up our gate at DAL, but with VX and AS merging, I'm not sure who will get the gate now. I'm guessing DL since the court blocked AA from flying to DAL. 
 
For PHX, for every mainline city we lost, it was replaced with an Express city to keep the flights the same as in the DOJ agreement. So far PHX has lost NS flights to CLE, FLL, YYC, YEG and next week ANC. We have gained MAF, LUB, RDM, MEM and SGU. I would hope they would add COS back to PHX and maybe OKC. I expect we will lose IND, MKE and CMH and maybe a few other marginal cities, but will remain NS service to most major markets and all AA hubs. I expect we will start to see the E175 in PHX to fly to many of the short and medium haul markets ie, ONT, BUR, LGB, OAK, SJC, SLC, ets, as most of the gates are getting markings for the E175. When the dust settles I think PHX will be 125 mainline and 150 Express including E175 and CRJ900, These are just my guesses.

 

[lpbrian]

I think ANC is seasonal. Maybe YYC and YEG are also?

 

[Kev3188]

Any idea how the RDM flights are doing?

 

[Jester]

My belief and I have said before is that PHX will become primarily an RJ hub to relieve those flight out of LAX with mainline flying to all the hubs and maybe some select cities (BOS? SEA? ATL?) along with RJs and E175s taking over more of the mainline flying into DSM, MCI, and STL in the short term.  Good hubs have good O&Ds and decent yields and compared to LAX, DFW and ORD, PHX would be a poor choice to keep as a hub.

 

[jimntx]

AA had to give up our gate at DAL, but with VX and AS merging, I'm not sure who will get the gate now. I'm guessing DL since the court blocked AA from flying to DAL. 
 

AA did not have to "give up" either of its two gates at DAL.  We just can't use them ourselves.  We have long-term leases on the two gates, but as I understand it, the AA/US merger agreement prohibits AA from using the gates for some period of time.  Eolesen should be able to clarify the exact terms for us.  I know there was some talk that DL making certain moves at DAL or VS vacating the gates would invalidate the merger agreement that AA can't use the gates.
 
Though I can't imagine why we would want to fly out of there.  I think the money we lost on the move to compete with WN on DAL-STL would have taught us some kind of lesson.
Flights with less than 30 passengers (which was common for the S80's we had on that route) rarely make money.  On DAL-STL I saw a full airplane exactly once.  The Cardinals and the Rangers were playing an interleague game in St. Louis.  A whole bunch of fans went up for the game because there were flights late enough back to DAL and DFW that they didn't have to stay overnight and pay for a hotel room.

 

[28L_or_10R?]

My belief and I have said before is that PHX will become primarily an RJ hub to relieve those flight out of LAX with mainline flying to all the hubs and maybe some select cities (BOS? SEA? ATL?) along with RJs and E175s taking over more of the mainline flying into DSM, MCI, and STL in the short term.  Good hubs have good O&Ds and decent yields and compared to LAX, DFW and ORD, PHX would be a poor choice to keep as a hub.

My belief is that when a major economic downturn like 2008 occurs there will be some hub closures and things will suss themselves out. I see some stuff with PHX that makes me wonder. Sounds like the connect runners never received T-Link like the other hubs. Why didn't they make the investment? Any talk of T-Link there? They really could've used T-Link back in the day, I'll say that... Also, on the CLT daily flight list PHX was always highlighted in dark as the other hubs were. No longer highlighted in dark. It could just be an oversight but little things in this industry arouse suspicion. As soon as people noticed that lips started flapping. Our paranoia serves us well.

 

[UPNAWAY]

Good thread idea. I think PHX wil be fine after some dust setteling. It certianly will not be a STL, CIN, PIT type of deal.
What I think will be interesting is seasonal and regional economic adjustments that can be made once any aircraft and crew can fly pretty much anywhere. Also I assume there will be some more infill of flying to cities not currently served from one legacy's hubs but servied but the other?

 

[FWAAA]

My belief and I have said before is that PHX will become primarily an RJ hub to relieve those flight out of LAX with mainline flying to all the hubs and maybe some select cities (BOS? SEA? ATL?) along with RJs and E175s taking over more of the mainline flying into DSM, MCI, and STL in the short term.  Good hubs have good O&Ds and decent yields and compared to LAX, DFW and ORD, PHX would be a poor choice to keep as a hub.

In 2015, PHX had the 11th highest domestic O&D, just ahead of DFW. My prediction is that AA continues to fly from PHX to/from the various big cities that generate the Phoenix O&D. I don't see a future emphasis on connecting traffic, but with a healthy schedule of mainline planes to/from the biggest markets, connecting opportunities will be there to fill the planes. Some connections no longer make as much sense, like the shuttle-like service on TUS-PHX. That route has literally zero O&D and existed solely because LUS had no other close-by hubs from which to serve TUS.

I think that PHX will continue to see plenty of 2-class CRJs and E175s, but I don't see it being an RJ hub.

Sure, Southwest ran up to 179 daily departures at PHX this summer (by definition, all mainline), but IMO, business traveler suits aren't going to fly Southwest to PHX on 3-4 hour routes as often as they will on one or two hour flights. That will limit the ability of WN to "own" PHX the way WN owns the intra-CA and intra-TX short-haul markets. On short hops, there are lots of suits flying WN. On cross-country flights, not so much.
 
 

Though I can't imagine why we would want to fly out of there.  I think the money we lost on the move to compete with WN on DAL-STL would have taught us some kind of lesson.
Flights with less than 30 passengers (which was common for the S80's we had on that route) rarely make money.  On DAL-STL I saw a full airplane exactly once.  The Cardinals and the Rangers were playing an interleague game in St. Louis.  A whole bunch of fans went up for the game because there were flights late enough back to DAL and DFW that they didn't have to stay overnight and pay for a hotel room.

I don't think that AA's previous DAL experience in competing with WN to the Wright Amendment/Shelby Amendment states is an effective predictor of what would happen if AA was able to compete today to LGA, LAX, ORD, DCA and MIA. When AA was flying those empty MD-80s to its dying hub at STL, it was prohibited from flying mainline planes (with more than 56 seats) to the big business hubs. Since October, 2014, Southwest has been allowed to fly DAL-Anywhere Domestic, and WN has grown dramatically at DAL. I don't pretend to know whether AA would want to fly 20 daily mainline flights from DAL if it had not been compelled to lease those two gates to VX, but I don't think AA would automatically bleed money on routes like LGA, LAX, ORD, DCA and MIA.

Although I don't think that WN is attracting all the suits in the metroplex to its DAL flights, there may be some suits who are willing to trade assigned seats, first class and MCE and meals for the convenience of close-in Love Field. Those are the passengers AA would presumably keep in the AA fold if it were flying from DAL to its key business hubs.

 

[UPNAWAY]

My guess is LUV flights would only cannablize existing DFW flights and also runs the risk of a pissing match with SWA. I don't see any real upside.

 

[Jester]

Good hubs have good O&Ds and decent yields and compared to LAX, DFW and ORD, PHX would be a poor choice to keep as a hub.

 
 

In 2015, PHX had the 11th highest domestic O&D, just ahead of DFW. My prediction is that AA continues to fly from PHX to/from the various big cities that generate the Phoenix O&D. I don't see a future emphasis on connecting traffic, but with a healthy schedule of mainline planes to/from the biggest markets, connecting opportunities will be there to fill the planes.

 
PHX may have good O&D, but what about the yields?  I recall reading the yields were pretty lousy, and not surprising given the median household income given Phoenix MSA household income is $44,752 compared to the MSAs of Los Angeles, Dallas, and Chicago being $45,903, $47,418, and $51,088 respectively.
https://en.wikipedia.org/wiki/Highest-income_metropolitan_statistical_areas_in_the_United_States
 
Throw in high wages in a low yielding hub market, and the economics just don't make sense to me.